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Wanda's AMC deal gets nod from regulators

Updated: 2012-07-27 09:08
By Huang Ying ( China Daily)

Dalian Wanda Group Co Ltd, the operator of China's largest movie theater chain by box office revenue, and AMC Entertainment Holdings Inc, jointly said on Wednesday that they have received all necessary regulatory approvals in the United States and China for the planned acquisition of AMC by Wanda.

Wanda and AMC received a notice from the Committee on Foreign Investment in the US that it had cleared the transaction, and the companies had previously received notification from the US Federal Trade Commission of early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act in relation to the transaction, according to the announcement.

The two companies said that they expect to complete the deal at the end of August.

Wanda's AMC deal gets nod from regulators

A movie theater of the US cinema chain AMC Entertainment Holdings Inc in Monterey Park, Los Angeles. China's Dalian Wanda Group is set to complete the acquisition of AMC at the end of August after getting regulatory approvals for the deal. [Photo/Agency] 

The $2.6 billion deal gained approval from China's top economic planning agency - the National Development and Reform Commission - in June. The Ministry of Commerce and the State Administration of Foreign Exchange also gave Wanda approval to proceed with the planned acquisition.

The Chinese private conglomerate signed an agreement with AMC, the world's second-largest theater chain, in May, after two years of negotiations.

Wanda paid $2.6 billion for the acquisition and promised to invest up to an additional $500 million in AMC to fund its strategic and operating initiatives. As part of the transaction, Wanda has to assume the debt of the US cinema chain.

"This acquisition will help make Wanda a truly global cinema owner, with theaters and technology that enhance the movie-going experience for audiences in the world's two largest movie markets," Wang Jianlin, chairman of Dalian Wanda Group, said at the signing ceremony of the deal.

Gerry Lopez, chief executive officer and president of AMC, said: "As the film and exhibition business continues its global expansion, the time has never been more opportune to welcome the enthusiastic support of our new owners."

Wanda's AMC deal gets nod from regulators

Wanda Cinema Line currently owns 86 cineplexes and 730 screens, of which 47 are IMAX screens, and it intends to expand its chain to more than 200 cineplexes with 2,000 screens by 2015, according to a statement on Wanda's official website.

AMC operates 346 multiplex theaters with 5,028 movie screens. As the world's largest operator of IMAX and 3D screens, it owns 120 IMAX screens and 2,170 3D screens, according to an official statement jointly released by Wanda and AMC.

Wanda generated revenue of 56.21 billion yuan ($8.8 billion) in the first half of the year, a year-on-year decline of 9.1 percent, and its total revenue for the whole year is expected to reach 140 billion yuan, Wang said at a meeting reviewing the company's work in the first half of the year.

However, its cinema chain arm reported year-on-year growth of 61 percent, according to the company.

Wang also revealed at the meeting that AMC, which has suffered losses for three consecutive years, returned to profitability in the first half of the year with Wanda's injection of capital. He added that it was a "considerable" amount of profit.

Wanda will continue to seek overseas investment opportunities around the globe in the next five to 10 years, especially in sectors such as culture, tourism and retail.

By June 30, Wanda had opened 50 Wanda Plazas and runs 28 five-star hotels.

Xinhua contributed to this story.